Open Forum

Our museum may be going through a major expansion project in the next few years.  Besides the need for more exhibit space and upgraded HVAC systems, the opportunity exists to create a top-shelf events rental space like nothing else in our area.  Since the construction project just to expand our exhibit spaces requires a two story wing, the conventional wisdom seems to be to take advantage of this and add the additional third level that would be dedicated to events rentals - a space we currently do not have other than galleries.  The thinking being that it is less expensive to build in one phase than to try another capital campaign in a few years.  Best to fill your bucket on one trip to  the well, lest it go dry later.

Admittedly, this adds a significant cost to construction, but it is the one component of the project sure to increase revenue, whereas expanded exhibition space might give us a bump in admissions.  As I present all of this information to my Board, it would be useful to know what percentage of their annual revenue other museums with dedicated events rental spaces earn.  Even if you typically utilize your galleries for this purpose, your input would be appreciated as well.

Thanks in advance for your help.

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David Beard
Director
Museum of the Gulf Coast
Port Arthur TX
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David,

My museum only really just started getting into rentals ourselves, so I won't be able to help with the figures, however I would recommend you become a vendor on Wedding-spot.com. The vendor profile is free, and the interest we have generated from this website has tripled our rental inquiries in just over a week.

Heather

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Heather Garside
Curator/Director
Passaic County Historical Society
Paterson NJ
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Thanks Heather.  With the tripled inquiries, what do you predict the frequency of rentals might be?  I have heard of wedding-spot.  We also have a regional site that list wedding venues.  Between the proposed facility, with panoramic water views, and expanded rentals of our historic home, I suspect we will do a brisk rental business.

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David Beard
Director
Museum of the Gulf Coast
Port Arthur TX
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Also plan on at least a half time person to manage this for you. Also, weddings are one-off relationships be tween the happy couple and the museum. For this reason you need to seriously consider exclusive contracts with food and beverage vendors. This way the vendors know you have to be pleased to get the work. By the way, we stopped doing weddings, huge headache. 

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Greg Koos
Executive Director
McLean County Museum of History
Bloomington IL
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David--

It is difficult to to estimate your own potential revenue by comparing it as a percentage of overall revenue. There are too many variables involved, the biggest being the size of the space, the market demand, the quality of the space, and its accessibility before and after hours.

One history museum I know that is located in the heart of an affluent neighborhood has a dedicated 15,000 square foot  event space with a spectacular view of a park and a separate entrance off the main lobby. It is rented several times a week for lunches, dinners, and weddings and generates a substantial portion of the museum's earned revenue.

Another art museum uses their beautiful 3,000 square foot lobby as an event space. This restricts it to after hours use with setup beginning after 5 and is hard on the finishes. They debate whether the revenue is worth the effort.

I suspect you are thinking somewhere in between these two extremes and your results will depend on the specifics of your space and your community. I do this kind of ballpark estimating at the beginning of some of our projects. I will do a low and high estimate of the number of events and the potential net revenue from each--low and high figures for XX events at $XX net revenue. You can get in the right ballpark by checking out the rate sheets for other venues in your area and by talking to local caterers. Be sure to figure in additional maintenance costs. For more detailed projections there are a number of consultants who specialize in museum food service and events. It will be worth talking to one of them if you move forward.

I don't know how far along you are in your design process, but be sure to think through how access to the event space works, for both attendees and caterers. Far too many museums design these spaces as afterthoughts, and servicing them becomes a real challenge.

Good luck,

Guy

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Guy Hermann
Principal
Museum Insights

Our event rental income is about 11.5% of overall income. All events take place in our galleries right now - we do not have a separate function space. As a gauge, we're a small art museum with an operating budget of about $650,000. Interestingly, we just purchased a new building with rental events being the primary income generated from the space in the short run - this being, to pay down the cost of the building. Eventually, mission-based activities would take precedence over the rentals.

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Dawn Salerno
Director of Education
Mystic Arts Center
Mystic CT
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Thanks for the input.  I realize it is difficult to gauge our own potential rental income at this stage, but the experiences of other institutions are useful when engaging boards about such things.  The proposed spaces will be designed and built with rentals in mind.  As such, there will be easy access for both clients and caterers, dedicated caterer's kitchen/prep areas and both refrigerated and dry storage.  Knowing where other institutions have fallen short in planning can help guide us in our planning.

With access primarily via the new wing, we can keep the rental clients separated from the main museum facility, thus allowing a broader range of business hours events.  The plan is to replace existing elevator cars with double door models, allowing us to lockout or open up access to the main facility in the event we want to add a special tour to the rental.  I know that this kind of access control can often be problematic for many institutions.

The events spaces will also serve as programming spaces and be made available free for certain kinds of community events.

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David Beard
Director
Museum of the Gulf Coast
Port Arthur TX
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There are some good comments already.  You might want to read "Restaurants, Catering and Facility Rentals Maximizing Earned Income." The book is authored by Arthur M. Manask and Robert D. Schwartz, published by Museums Etc.  I don't think these numbers are useful, but might give you some scale.  Our annual operating revenue from rentals ranges from 5% to 7%.  Last year's revenue was $385,000, almost entirely from weddings.  We have a good return on investment for this operation. Our season is May to October. We are in a very competitive market, but are a unique venue for weddings and receptions of 90 - 125 guests.  We fit more, but this is our best-sized niche in a tented, seasonal facility.  Our rental program is about 25-years old and is near capacity.  We will be embarking on a new education and event facility.  Make sure you have a food service space design specialist on the team.  You will need more storage support and operational staging space needs than are typically engineered.  Best of luck.  Think adaptable design.  Be cautious that you don't under built HVAC.  I have seen this happen in too many facilities.

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Robert Gutowski
Director of Public Programs
Morris Arboretum of the University of Pennsylvania
Philadelphia PA
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Hello David,

We have been working with museums of all sizes and types for over 20-years and typically do not see them track facility rental revenue as a % of annual revenue. The reason would be that each museum is so different in so many regards when it comes to facility rental (and catering income from facility rentals) capabilities, that what is most important to most is annual 'net' facility rental income (after all direct expenses of doing it).

You are fortunate with your expansion to be able to add a dedicated event space. Few museums that did exactly this that you might want to reach out to is Walker Art Center, Indianapolis Museum of Art and The Minneapolis Institute of the Arts.

If you would like to discuss in more detail and/or I can answer any other questions in this regard please email me at artm@manask.com. Happy to help if I/we can.

Art

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Art Manask
President
Manask & Associates
Burbank CA
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Facility rental revenue is about 2.2% of our budget, and we have 2 staff (70 hours total) running the entire special events department of our museum, which includes parties, fundraisers, and the logistics of educational programs. We expanded and renovated in 2010, but did not specifically tailor our new spaces for rental revenue, although we knew that what we were constructing would allow us to expand our existing rental program, whose revenue was almost negligible at the time.

I am proud of our rental program and believe it is worthwhile. However, I am cautious to increasingly prioritize this program and dedicate more and more resources to it. We have no plans to discontinue or decrease our rental activities, but I am ever mindful that there needs to be a healthy balance and preferential treatment for educational service to the community and mission-driven activities.

Best of luck with your project!

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Charles Shepard
President & CEO
Fort Wayne Museum of Art
Fort Wayne IN
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